With untapped mineral wealth worth more than $840 billion, the Philippines is “one of the world’s most highly mineralized countries,” according to a US Department of State report on the Philippine economy.

Despite its rich gold, copper and chromate deposits, however, “the Philippine mining industry is just a fraction of what it was in the 1970s and 1980s when the country ranked among the 10 leading gold and copper producers worldwide,” the Washington-based agency said.

“Low metal prices, high production costs and lack of investment in infrastructure contributed to the industry’s overall decline,” the State Department said in the report, which the US Embassy in Manila has posted on its website.

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It noted that “a December 2004 Supreme Court decision upheld the constitutionality of the 1986 Mining Act, thereby allowing up to 100 percent foreign-owned companies to invest in large-scale exploration, development and utilization of minerals, oil and gas” in the country.

Local mining bans

“Some local government units have enacted mining bans in their territories, citing concerns over environmental degradation, unequal distribution of tax revenues, unemployment caused by displacement of small-scale miners, and marginalization of indigenous people,” the agency said.

According to the State Department report, “Philippine copper, gold and chromate deposits are among the largest in the world.”

“Other important minerals include nickel, silver, coal, gypsum and sulfur. The Philippines also has significant deposits of clay, limestone, marble, silica, and phosphate. Natural gas reserves discovered off Palawan have been brought on line to generate electricity,” it said.

In the same report, the agency said the Philippine economy “proved comparatively well-equipped to weather the recent global financial crisis, partly as a result of the efforts to control the fiscal deficit, bring down debt ratios and adopt internationally accepted banking sector capital adequacy standards.”

Slow growth

“After slowing to 3.8 percent growth in 2008 and sputtering to 1.1 percent in 2009, real year-on-year GDP growth rebounded to 7.6 percent in 2010, a 34-year high fueled in part by election-related spending, optimism over the peaceful transition to a new government, and an accommodating monetary policy,” the report said.

However, “growth slowed in 2011 and is likely to be in the 3.5 percent to 4 percent range,” it said.

According to the State Department, “the portion of the population living below the national poverty line increased from 24.9 percent to 26.5 percent between 2003 and 2009, equivalent to an additional 3.3 million Filipinos.”

The agency also reported that the Philippines’ business process outsourcing (BPO) industry “currently accounts for about 15 percent of the global outsourcing market and has been the fastest-growing segment of the Philippine economy.”